Siemens and Bimantara form power partnership
JAKARTA (JP): Siemens AG of Germany and Power Gen. of Britain will likely join the Bimantara Group in constructing two coal- fired power generating units in Paiton, East Java, with a combined capacity of 1,200 megawatts (MW) at a cost of US$2.1 billion.
Kurt W. Pfeiffer, chief representative of Siemens for Indonesia, told The Jakarta Post yesterday that the government has given the three business institutions the green light to establish the units, the second to be awarded to the private sector at the Paiton power station.
The State Electricity Company (PLN) has operated the first two units of the station with a combined capacity of 800 MW, while a consortium of Indonesian-American-Japanese companies will set up two other units with a total capacity of 1,200 MW.
Pfeiffer said Siemens, Power Gen. and Bimantara Group have established a consortium to sponsor the construction of the two power units.
The consortium is 50 percent owned by Siemens, 35 percent by Power Gen. and 15 percent by the Bimantara Group.
Contract
"I would say that the contract, now under negotiation with the government, for the construction of the two units will be under a direct deal," Pfeiffer said.
He added that the consortium was invited by the Ministry of Mines and Energy on Sept. 22 to present its proposal and clarify its documents for the project.
If the government approves the proposal, the consortium will begin negotiations on the design and construction by the end of this year, he said.
"The construction may start early next year and be completed in 1997," he said.
Pfeiffer said the consortium will likely sell its electricity to PLN at the price of some 7.5 U.S. cents per kilowatt hour (kWh) under a 30-year deal.
By comparison, PT Batu Hitam Perkasa, the consortium which will set up two other units at Paiton, has agreed with PLN to sell its electricity at 8.56 U.S. cents per kWh for the first six years, at 8.41 cents for the next six years, and at 5.54 cents for the remaining 18 years.
Pfeiffer said his consortium will be able to sell its electricity at a lower price than Batu Hitam because its investment will be lower.
Batu Hitam's investment will reportedly reach $2.5 billion.
Regarding local content, Pfeiffer said that his consortium will be required to use local components for 25 percent of the construction of its project.
He said Siemens will supply all the main equipment for the plant, including generators and turbines, while Power Gen. will be responsible for the design and civil work.
Pfeiffer said his consortium will procure coal from local companies for the firing system of its power project.
The consortium is now negotiating with five coal producers for supplying coal for the project.
The state-owned coal mining company PT Tambang Batubara Bukit Asam operates coal mines in Sumatra, while a number of private firms operate mines in Kalimantan.
Siemens, in cooperation with Japanese and Indonesian companies, has also won another power project in Grati, East Java, with a capacity of 868.5 MW. (fhp)